DEUTSCHE Bank was last night preparing to inject £200 million sterling in cash into three suspended investment funds run by its British subsidiary, Morgan Grenfell Asset Management, in order to restore confidence among 90,000 investors.
Deutsche faces an unknown loss in buying out a portfolio of unlisted securities held in the £1.4 billion sterling funds.
Morgan Grenfell Asset Management announced that it would resume trading in the three funds, which include two unit trusts, today.
Mr Peter Young, the fund manager in charge of the largest unit trust, the Dublin-listed Morgan Grenfell European Growth Trust, has been suspended by his employer.
Investigations into three funds centre on the valuation of unlisted securities in the Scandinavian market that Mr Young bought. The securities were being re-valued yesterday by advisers.
Deutsche will absorb the risk of the unlisted securities being worth less than the sum reflected in their unit trust prices before the suspension on Monday.
Such a move is unprecedented in the British unit trust market, which has a reputation for providing a relatively safe method for private individuals to invest in shares.
